In June 2017, the Finnish Supreme Court handed down its judgment KKO:2017:42 in which the court considered the distinctiveness of a three-dimensional trademark and the likelihood of confusion between the shapes of competing goods. The defendant, Hardware Group Oy, had released its EDGE keys onto the market which bore resemblance with the claimant's (Abloy Oy's) EXEC keys after Abloy Oy's protection of the design and the patent protection related to its keys had expired. Abloy Oy claimed that Hardware Group Oy's keys infringed Abloy Oy's three-dimensional trademark first by stating that the defendant's key heads cause a likelihood of confusion among the public with Abloy Oy's trademark, and secondly by alleging that the defendant's use of Abloy Oy's trademark, which has reputation in Finland, would take unfair advantage of the distinctive character or the repute of Abloy Oy's trademark, or be detrimental to the distinctive character or the repute of the trademark.

Prior to the case at hand, the Court of Justice of the European Union ("CJEU") has considered the trademark protection of the shape of goods in several cases. The CJEU has, inter alia, held that all factors must be taken into account when the likelihood of confusion is assessed and that the more distinctive the earlier mark, the greater will be the likelihood of confusion (see e.g. CJEU's ruling of 22 June 1999, Lloyd Schuhfabrik Meyer, C-342/97, para. 18 and 20). The CJEU has also stated that average consumers are not prone to make assumptions about the origin of goods based on the shape of their packaging and it could therefore prove more difficult to establish distinctive character in the case of a three-dimensional trade mark than in the case of a word or figurative mark (see e.g. CJEU's ruling of 12 February 2004, Henkel, C-218/01, para. 52). Furthermore, the CJEU has held that a distinctive character can be established even for three-dimensional trademarks with only functional essential characteristics if the shape of the goods at issue incorporates a major non-functional element, such as a decorative or imaginative element which plays an important role in the shape (see e.g. CJEU's ruling of 14 September 2010, Lego Juris A/S, C-48/09 P, para. 52).

In the case at hand, the Supreme Court held that the products of Abloy Oy and Hardware Oy fall into the same product category and have a rather similar general look which causes a greater likelihood of confusion among the public. However, the Supreme Court also held that the quality, purpose of use and the manufacturing processes do provide certain requirements for the appearance of the key heads and that the key heads protected by Abloy Oy's trademark are not materially different from key heads commonly used in the relevant market. Accordingly, key heads with round corners, holes drilled for attachment and which consists of black plastic are common on the market.

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The Supreme Court held that the shape of Abloy Oy's key head was considered mainly functional rather than decorative or imaginary. Thus, the scope of protection of Abloy Oy's three-dimensional trademark was considered narrow. According to the Supreme Court, the most distinctive part of the key head protected by Abloy Oy's trademark was the diagonally placed oval mounting hole. As part of its overall assessment, the Supreme Court stated that the oval mounting hole was bigger and placed horizontally in Hardware Group Oy's key head and that the key head also contained the defendant's mark "EDGE". These differences were sufficient for the Supreme Court to maintain the Market Court's earlier ruling that there was no likelihood of confusion between Hardware Group Oy's products and Abloy Oy's trademark.

In relation to the reputation of Abloy Oy's trademark in Finland, the Market Court had held that Abloy Oy's trademark did not have reputation within the meaning of Section 6 (2) of the Trademarks Act and due to the restrictions in the granted leave to appeal the Supreme Court did not reassess this issue. However, the Supreme Court stated that the reputation and distinctiveness of the trademark also have relevance when considering the likelihood of confusion, even if the trademark would not in casu be considered to fulfill the criteria set out in Section 6 (2) of the Trademarks Act. The Supreme Court based its consideration on the following criteria established by the CJEU in its earlier practice (see e.g. CJEU's ruling of 18 June 2002, Philips, C 299/99, para. 60): (i) the market share, (ii) the time and intensity during which the trademark in question has been in use, and (iii) how extensively the target audience recognizes the commercial origin of the trademark. In the case at hand, the Supreme Court considered it evident that Abloy Oy has a strong position in the Finnish market and that Abloy Oy, as well as its competitors, have been using the triangular shaped key heads for a long time. Abloy Oy had also conducted a survey according to which 75% of the consumers subject to the survey had considered Abloy Oy as the commercial origin of both the Abloy Oy's EXEC key and the Hardware Group Oy's EDGE key. However, the Supreme Court held that Abloy Oy's consumer surveys had not sufficiently established that Abloy Oy's three-dimensional trademark would, as such, have been the reason for the confusion of the commercial origin by the survey participants.

The Supreme Court also emphasized that the expiration of Abloy Oy's patent protection was rather extensively informed in media and sophisticated consumers should be aware of the fact that similar key heads are available from different manufacturers. Therefore, the Supreme Court dismissed Abloy Oy's appeal.

In the judgment, the Supreme Court gave three-dimensional trademarks a quite narrow scope of protection. It is therefore possible that even small differences can be sufficient to avoid infringement.